- Article, Singapore
- February 28, 2019
Company formation in Singapore has many benefits. The strategically located country has been the hub for many business houses in Asia. Singapore is a prime location for trade and business and has a strong emerging economy, because of which many Investors prefer Singapore for setting up their holding company. In this article, we will list down the reasons why you must set up a holding company in Singapore.
Reasons to Set Up a Holding Company in Singapore
Economic Growth
The government policies in Singapore have always been in favour of businesses. Government has taken many initiatives to establish and promote start-ups. This has helped Singapore economy to grow at a rapid pace along with achieving economic stability.
Tax Rates
Singapore offers the most attractive and competent tax rates to businesses. The marginal tax rates in Singapore is as low as 17%. Furthermore, the effective tax rate can be lowered even more. Therefore, the tax benefits make Singapore the best place to establish your holding company.
No Double Taxation
The biggest benefit of setting up business in Singapore is the avoidance of double taxation. Singapore has signed double tax agreements with more than 40 countries across the world. This gives your business in Singapore an edge over global businesses because your business will not have the burden of double taxation.
Access to Skilled Workforce
Singapore has a large population of skilled and talented workforce. If your business requires any skills that are not available locally in Singapore then you can easily procure a visa for the talented manpower.
Relationship with Other Countries
Relationship with other countries plays a vital role while establishing a business in a country. Singapore has signed investment guarantee agreements with over 30 countries. Such agreements promote inflow of investment in the country and help the businesses in the country to prosper.
Ease of Doing Business
As per the rankings by the World Bank, Singapore is ranked among the top 3 economies of the world when it comes to ease of doing business. Singapore has been maintaining this record since the last 12 consecutive years. Moreover, the process of company registration in Singapore is relatively easier. If you are looking for company registration in Singapore, consider a professional firm like IMC Group who can not only assist you with company registration process but also extend support for accounting services in Singapore and taxation services in Singapore.
No Tax on Capital Gains
Investors having holding company in Singapore get the benefit of no tax on capital gains. Zero tax on capital gains and lower income tax rates makes Singapore an attractive place for the businesses to establish their holding companies in the country.
No Tax on Dividends
Any dividend paid in Singapore on or after January 1, 2008, shall be exempt from tax under the taxation system of the country. To simplify, the shareholders of the company shall not be taxed on the dividend income. Such exemptions are given to the shareholders to attract more investors in the country.
Incentives to the Holding Companies
In order to encourage multi-national companies to set up their headquarters in Singapore, the government of Singapore provides headquarter incentives to the holding companies. Other incentives that are available to the holding companies in Singapore include Pioneer Status or Development and Expansion Incentives.
Better Quality of Life
Every individual wants to live a good quality of life. Singapore provides excellent facilities and quality of life to the public. This gives a good reason to set up or relocate your businesses to Singapore.
Above mentioned are a few benefits of setting up a holding company in Singapore. For more details, get in touch with IMC Group.
- Newsletter, Singapore
- February 28, 2019
Singapore’s VCC (Variable Capital Company) framework has been a major development for investment fund industry looking for investing in India and also in whole of Asia-Pacific. Especially from India’s point view, the VCC regime can be a game-changer.
Singapore ranks as a significant global hub particularly for the asset management industry, due to its AUM (Assets under Management) shooting up to $2.4 trillion. It has also become one of the countries who are investing the most in India, with its cumulative FDI gong over$73 billion and its portfolio investment crossing $37 billion.
However, most of the funds handled by managers based out of Singapore are pooled or domiciled out of Singapore because of there is no flexible corporate vehicle available. To tackle this, Singapore is launching a corporate vehicle named the Variable Capital Company (VCC). The good news is that the VCC framework is cleared by the Singapore Parliament and would be operational early this year.
The corporate framework
The VCC framework is intended just for fund industry as it’s compulsory to appoint a Singapore-regulated fund manager along with an independent custodian.
A VCC is typically alike a conventional business in terms of a board of directors, share capital with limited liability, and other features. In addition, to aid investors’ entry and exit, the VCC framework offers additional flexibility:
- It can distribute out of its capital to shareholders in case it makes no profits or has reserves;
- Its shares are allowed to be redeemed regularly or even bought back without having to seek shareholder approval every time;
- Its paid-up capital’s value is always considered equivalent to its NAV and its shares should be issued, redeemed and even repurchased at such NAV; and
- Other than various classes of shares, VCCs are allowed to issue bonds and debentures listed on stock exchanges;
VCCs could be established either as a single standalone fund or it could be an umbrella fund. A standalone fund gets to enjoy all the features of the VCC framework, however, an umbrella fund has an advantage of making two or higher sub-funds where the assets and liabilities are totally segregated, that is, losses of a sub-fund would not impact other sub-fund’s NAV.
The structure of an umbrella fund helps a big fund manager gain through economies of scale as they save operational and other compliance costs connected to establishing multiple corporate vehicles.
The taxation framework
A VCC is treated as a single entity for tax purposes. If it’s an umbrella VCC, the sub-funds are not needed to assume different tax compliance. Also, a VCC should be made eligible to utilize Singapore’s tax treaty network wherever it is taken as a Singapore tax resident who has based the ‘control and management’ in Singapore.
Regarding incentives, a VCC is entitled to apply for all tax exemptions offered to other funds handled by a fund manager based in Singapore. The exempt VCCs would also be entitled for GST remissions thus decreasing the Singapore GST incidence particularly on management fees to a tiny fraction. Fund managers are qualified to request for 10% concession of tax rate in terms of their fees from VCCs.
Re-domiciliation of current overseas funds operating in Singapore
The current offshore funds which have a framework like VCC would be allowed to be re-domiciled in Singapore. In case the overseas fund is not similarly structured as a VCC, in that case, restructuring could be explored before re-domiciliation.
This is likely to provide enhancement to local domiciliation of the investment funds in Singapore.
VCCs in Indian context
India-Singapore tax treaty was recently revised to remove the tax exemption of capital gains particularly on Indian company’s sale of shares. The treaty continues to offer grandfathered exemption especially for cash equity investments that were made till March 31, 2017. It also still exempts the profits from other financial instruments like bonds, derivatives instruments, debentures, etc.
The VCC framework offers an efficient method to deal with so many challenges posed to investment funds. After the framework is successful, fund managers can pool funds in Singapore only. In addition, the VCC would also have an investment manager, administrator and custodian based in Singapore, which will majorly reinforce the commercial substance for investment funds and support the case for treaty entry in this post-BEPS age.
- Article, Bahrain
- February 27, 2019
A business-friendly country, Bahrain always welcomes foreign investors. Having an easy and streamlined procedure for foreigners to invest in the nation, Bahrain also offers them many added facilities while they establish their business. For foreign company registration in Bahrain, you should be aware of the country’s business environment. To do this, the first step is to find about the various types of business entities possible in the country, followed by how to incorporate a company, and then what is the required legal documentation. Seems like a lot of information to find? Worry not! In this article, we have collated all the important information that will help you to set up a company in Bahrain in 2019.
Steps to set up a Company in Bahrain
To start a legal business in Bahrain, there are various things you need to complete. As a first step, you need to find which all approvals you would need and then fill an Application Form for Commerce Registration in the Bahrain Investors Centre (BIC). Then with the guidance of a BIC representative, you have to visit the particular ministry and after paying a fee of BD 2 post gaining the needed approvals, you would have to submit the required legal documents. You must note that the registration process typically takes 1 to 5 business days. Here are the detailed steps to establish your company in Bahrain:
- Opt for a Legal Structure: The most important decision as an owner of a business is to decide a legal structure for the enterprise you are starting. This decision would affect how your business would be managed, what will be the company’s owner’s personal liability, and how the ownership would be held. You could opt out of the following legal structures:
- Bahrain Shareholding Company (BSC – Open)
- Bahrain Shareholding Company (BSC – Closed)
- With Limited Liability Company (WLL)
- Partnership Company
- Simple Commandite
- Commandite by Shares
- Single Person Company (SPC)
- Individual Establishment
- Foreign Company Branch
- Finalizing a Company Name: A company name represents your products or services, brand and business forever; therefore, the ministry of Industry & Commerce (MOIC) has fixed certain guidelines to enable business owners search for the most apt company name. Investors should ideally recommend four business/company names; however, if any of the suggested names violate the guidelines, it would be rejected.
- Commercial Registration Papers: Commercial registration papers for companies are made at the Bahrain Investors Centre. But if it’s an individual enterprise, the papers will have to be made at the Ministry of Industry and Commerce Commercial Registration Directorate.
- Licensing and Approval: Some enterprises are given the commercial registration immediately from the Ministry of Industry and Commerce, but a few others might need a license/approval especially from over one government authority before getting a commercial registration.
Documents for starting a company in Bahrain
- A duly-filled company registration application form
- Draft of memorandum of association
- A resolution from board of directors resolving to set up the company in Bahrain
- Company representatives’ national ID card copies
- Resumes of all partners
- Lease agreement as a proof of the business’ commercial address
Bahrain is not only a thriving economy, but is also offering very beneficial opportunities and multiple avenues for setting up new businesses to investors. If you are looking for some professional help for getting foreign company registration in Bahrain, our team of expert business advisors will guide you at each step. Thinking of starting your own company in Bahrain? Do contact us and we would be pleased to help you!
- Article, Bahrain, Oman, Qatar, U.A.E
- February 26, 2019
The Gulf Co-operation Council (‘GCC’) region is undoubtedly a very attractive jurisdiction for global investments mainly because of its favorable tax regimes. As per GCC’s diversification strategy and to decrease reliance on revenue from hydrocarbons, GCC nations have devoted to launch new indirect taxes and some other taxation reforms. But the developing GCC tax regimes throw up a challenge to all the foreign investors wanting to set up their presence in the GCC, or acquire a business, sell, or divest in the GCC.
In this article, we are going to give you an overview of the key taxes in the GCC.
Taxes in the GCC Region – An Overview
- Corporate Tax
Corporate tax is a direct tax that is levied on a company’s taxable profits. People not residing in the GCC nation could be subject to corporate income tax or may be withholding tax as per the local rules in the particular GCC country. The non-residents doing business in a GCC country having a permanent setup are subjected to corporate income tax; however, non-residents earning taxable income in that GCC country could be subject to the withholding tax.
Some GCC countries like the UAE and Bahrain enforce only corporate tax on businesses operating in the oil and gas field and foreign bank branches. In the KSA, Kuwait, and Qatar, corporate tax is applicable on the profit share that is attributable to the non-GCC shareholders of the domestic entity.
- Withholding Tax
Withholding tax is that tax, which is deducted at source on the specific payments done by a resident in the GCC nation to someone outside of that nation. Varying rates are applicable depending on what kind of payments is made. Bahrain and UAE do not impose this tax, but other GCC nations impose withholding taxes if a resident pays interest or dividends and royalties to a non-resident.
- Zakat
Zakat is a type of Islamic tax that has been only enforced in some GCC nations like the KSA and Kuwait as of now. In the KSA, Zakat is mandatory on the shareholders of local companies who could be Saudi or GCC nationals. This tax is to be paid by the local company and is applicable at the rate of 2.5% dependant on the higher of the adjusted net profits or the Zakat base that is attributable to the shareholders who could be Saudi or GCC citizens.
- VAT
A type of consumption tax that is imposed on goods and services supply and is charged typically on the value which gets added on each stage of the supply chain. The GCC countries implement this tax at a 5% standard rate. Every GCC nation can enact their own VAT legislation which will be based on some common principles. Till date, KSA and the UAE have implemented VAT on 1 January 2018. Then, Bahrain went on to implement VAT on 1 January 2019. While doing transaction planning, companies should evaluate the VAT effect of the asset transfer carefully and check if such VAT treatment is applicable on the transaction.
- Excise Tax
Known as the ‘sin tax’, excise tax is a type of indirect tax that is levied on particular goods that could be detrimental to health or environment. Till date, the KSA, the UAE, Qatar and Bahrain have implemented this tax on tobacco products at 100%, carbonated drinks at 50%, and energy drinks at 100%.
- Customs Duty
The GCC nations follow a unified customs duty regime and this duty is imposed basically at the first point when the goods are entering in the GCC. Imported goods are subjected to customs duty at the rate of 5% of the total cost, freight (‘CIF’) invoice value and insurance. But, some goods could be subject to customs duty at a much higher rate, while some other goods, are totally exempt.
- Transfer Taxes and Stamp Duty on Real Estate
Stamp duty is imposed in Oman and Bahrain on transferring or registering real estate. In the UAE, there is a registration fee when someone transfers ownership of land or shares in the companies holding real estate.
To conclude, the GCC countries have maintained minimal or zero taxes as it attracts investments in the region. However, announcing new taxes like VAT, the variance between local tax legislation and double tax treaties and the approach of tax authorities make it complex for global investors. But if you are a foreign investor who has business interests in this region, you should keep abreast of all the GCC tax developments and re-examine your management strategies of tax risk in the region.
- Newsletter, U.A.E
- February 20, 2019
Recently, the DIFC introduced the new companies’ regime under the Companies Law (DIFC Law No. 5 of 2018), and also as per the Operating Law (DIFC Law No. 7 of 2018), and Companies Regulations and Operating Regulations (together the ‘New Legislation’), which became applicable on 12th November 2018.
The New Legislation is a replacement of the earlier Companies Law (DIFC Law No. 2 of 2009) and the operating regulations and it revised several areas regarding registration and operation of businesses in the DIFC.
The New Legislation was awaited by various small and medium size private companies that are limited by shares, including their shareholders and directors, and legal and financial experts advising businesses considering DIFC as the area in which to function or those who are already functioning in the DIFC.
These changes are specifically aimed at:
- Providing more flexibility to firms functioning in the DIFC;
- Depending more on enterprise-level internal audits and balances;
- Ensuring the discretion of the board of directors; and
- Prescribing a strong sanctions’ regime in case businesses don’t conform to DIFC law.
Likewise, in some other jurisdictions internationally, the role of Registrar of Companies’ (‘ROC’) would be to oversee and monitor if companies are complying with DIFC law.
Major Changes in the Previous Companies Regime
The main changes to the previous regime that was introduced under the Companies Law and Regulations relate to the following areas:
- types of companies/classification;
- articles of association;
- duties; and
- that can be imposed by the DIFC ROC especially in case of non-compliance with the New Legislation.
Types of Companies and Classification
Earlier, there were two ways to incorporate a company in the DIFC- a limited liability company or a company limited by shares.
Now, limited liability companies are no longer there and the only firms that can function in the DIFC are the ones limited by shares: be it private and public.
What Happens to Current Limited Liability Companies (‘LLC’)?
The ROC will direct every LLC registered under the DIFC for conversion to either a private or to a public company limited by shares so as to be in compliance with the New Legislation.
Private Company Limited by Shares (‘Ltd.’)
Just as the earlier company limited by a shares vehicle, the name that is approved for a private firm limited by shares as per New Legislation should also have the word ‘Limited’ or ‘Ltd.’ In the end. But, there are major changes in this structure to the earlier Ltd. structure, which specify the below requirements:
- no requirement of minimum share capital;
- at least one director; and
- company secretary remains optional.
Public Company Limited by Shares (‘Plc’)
The approved name of a public company that is limited by shares should end in ‘Public Limited Company’ or ‘PLC’. A PLC as per the New Legislation has:
- no limitation for the number of shareholders;
- a requirement of the minimum share capital of USD 100,000;
- at least two directors; and
- at least one secretary.
Articles of Association
A new standard of DIFC Articles reflecting the provisions of the New Legislation is also introduced. The need for a legal opinion to be given along with modified Articles of Association is now replaced with incorporator’s statement (for preliminary Articles) or the director’s certification (in case of post-incorporation changes) of compliance with DIFC law concerning the projected amendments to the Articles.
Directors’ Duties
The New Legislation also introduces several duties by which the directors should abide. They are:
- acting within the given powers;
- promoting the success of the business;
- exercising autonomous judgment;
- exercising rational care, ability and diligence;
- avoiding any conflicts of interest;
- not accepting any benefits from third parties; and
- declaring concern in a planned transaction or arrangement.
Fines
For ensuring that the companies follow the provisions of the New Legislation, some administrative fines have been introduced, which are levied and which range from USD 2,000 to 30,000.
To conclude, the New Legislation further improves the legislative regime of the DIFC, offering the current DIFC companies and the new investors more flexibility in running their businesses, with better and more options related to the regulation required. So if you are thinking of business setup in Dubai free zone or company formation in Dubai, this is the best time to do so.
- Article, India
- February 20, 2019
The Ministry of Corporate Affairs (MCA) has taken a few severe actions in regard to the directors of the company that involves DIN deactivation, show cause notices, strike off the companies, KYC, etc. These measures are taken in order to align Indian businesses with global standards. Therefore, it is the time when the Indian companies that are closely held by the family members, whether public or private, need to change their way of thinking and start complying with these rules and regulations. As per the Companies Act 2013, it is the responsibility of the board that the rules and regulation made under the act are followed and complied.
It has been discovered that the companies which have a transparent business policy and complied timely with the laws, have an edge over its competitors. In order to establish transparency, companies have to comply with the provisions of the law and follow the advice of professionals like auditors and company secretaries.
Directors are the backbone of any company. Any failure or default in obliging with their duties will not only lead to punishment or penalty but also lead to losses for shareholders and hamper the reputation of the company. Although most of the directors are loyal to their companies, they are not able to comply with the laws due to lack of awareness and knowledge.
In this article, we will guide you on the duties and responsibilities of the directors of the company.
How Company is Different from Proprietorship or Partnership Firm
Let us have a look at some of the points that differentiate a company from proprietorship or partnership firm.
- A company is a separate legal entity.
- Company has limited liability.
- Company has perpetual succession and never dies unless there is a wound up.
- Company is an artificial person.
- Shares of the company can be transferred freely and easily.
- The directors or shareholders or members cannot claim themselves to be the owner of the company’s property.
- A company can sue and can be sued.
- A company has a dual relationship.
- Even though a company is not a citizen but it has its nationality and residence.
Board of Directors
A company performs its functions through shareholders and board of directors. The board of directors of a company looks after the business of the company, makes operational and strategic decisions and ensure that the company meets its statutory obligations. Board of directors can be said to be the backbone of the company as the overall performance of the company is dependent upon them. The directors are responsible for achieving the objectives of the company mentioned in its memorandum of association.
Directors
As per section 2 (10) of the Companies Act 2013, the board of directors in a company is a collective body of the individual directors. Under section 2 (34) of the act, a director is a person who is appointed to the board of a company. The board of directors is a body of individuals who collectively take decisions to direct, supervise and control the functioning of a company. Section 149 of the Companies Act 2013, says that the board of directors of a company should comprise of individuals only. This means that no association, firm or body corporate can be appointed as a director. No one can assign the office of director to any other person under section 166 of the Companies Act 2013. Any assignment made would be void. This brings to the conclusion that in a company only individuals can be a director and such appointed director cannot assign his office.
Importance of Directors
Directors represent the company. Even though the shareholders have the authority to decide on the appointment and removal of directors, it is the directors who run and manage the business. If a company does not comply with any provisions of the companies act, the company shall be liable for fine or penalty because of the board of directors. The board of directors can do anything which is beneficial for the company and within their powers. However, the board of directors cannot exercise any power which is restricted as per the provisions of the Companies Act 2013 or the memorandum or the articles of the company. To conclude, directors perform multiple roles in a company and the performance of the company is dependent on them.
Duties and Responsibilities of Directors
Directors must ensure that the company is managed in the most efficient manner. They must use their powers wisely and delegate the responsibilities to CEO, CS, MD, etc. In the end, the responsibility of the company’s performance will be on the shoulders of the directors.
- Bahrain, Newsletter
- February 19, 2019
Simon Galpin, who is the Managing Director of Bahrain Economic Development Board (EDB), said Bahrain views the fourth industrial revolution (4IR) as one of the biggest opportunities which is going to help their economy to become more dynamic and responsive.
Providing an access to the Gulf region, Bahrain is all ready to make a big presentation at the WEF summit for attracting new investments and is also giving an assurance of opening up a wide array of opportunities specifically for the Indian investors.
Galphin said during an event in the annual meeting of the World Economic Forum (WEF) that they are in quest of capitalizing on the 4IR prospect by launching a reform series across the economy, specifically in the digitizing industries like finance, and also in the education sector and logistics.
He also mentioned that the Davos attendees think of Bahrain as very promising and also notice the huge potential for company formation in Bahrain and the opportunities the kingdom has to offer for all the global investors. Having said that, they are also very surprised by the effortlessness with which new businesses are able to set up their offices and run their operations.
On meeting some Indian leaders here, he was of the view that both these countries (India and Bahrain) go back with a long history of financial and cultural relations and both the parties are eager to advance their relations to a deeper level in the coming times.
Through this collaboration, both these nations are looking at building an India-Bahrain business corridor, which will be a mutually-advantageous affiliation that would ensure new trade opportunities, interchange of ideas and also advancement of new innovations.
The political leaders and business heads in India are equally excited as are the leaders in Bahrain as this collaboration will present shared opportunities because of the advancements happening in Bahrain.
He also said that one of the Indian investors he was talking to was surprised and excited because he could now establish his business or a joint venture in real estate in Bahrain without even having to go to any government department even once, as everything was available online in very simplified procedures.
Talking about the future plans that Bahrain EDB has in store for India, Galpin also said that they did a very successful road show in India recently, where they got a chance to meet with some government officials and companies, all of whom seemed quite keen on reinforcing the ties between these two nations.
Because of such successful examples, another EDB office is being opened in India, which is in addition to the current ones in Mumbai and Delhi.
He also mentioned that the Indian investors can gain because of the ‘Rules of Origin’ principle which applies in worldwide trade, which allows them to enter less open markets such as the United States and then they could assist build up emerging industries like the fintech, which is enormously promising in the kingdom.
Previously in a session on the event of ‘India 4.0: Making technology work for all’, Galpin had said that India has been leading the world when it comes to technology-enabled governance; for example, Aadhaar, the unique ID scheme of India, which changed the way the nation passes on the welfare benefits especially to the needy and how it accesses the required data for KYC and for other purposes of validation by using safe and secure means.
He also said that some cutting-edge and latest technologies of the future, such as AI, robotics, big data and analytics, have already been offering huge opportunities in India.
The public sector organizations and huge multinational companies and corporates operating in sectors like fintech, genome research, pharma, and bio similars, are also considering India as an incubator of these highly-developed technologies for large scale deployment in international markets.
- India, Newsletter
- February 19, 2019
The Institute of Chartered Accountants of India or ICAI has recently collaborated with the Invest India. Both the parties signed a Memorandum of Understanding (MoU) on February 4, this year, which also happened to coincide with ICAI’s Platinum Jubilee Annual Function held in New Delhi under the guidance of the Committee for Export of CA Services & WTO of ICAI. CA. Naveen N. D. Gupta, who is the President, ICAI and Mr. Deepak Bagla, who is the Managing Director and CEO of Invest India signed the dotted line. Amongst the renowned personalities present there were, Mr. Rajiv Mehrishi, the Hon’ble Comptroller and Auditor General of India, CA. Prafulla P Chhajed, the Vice-President of ICAI, CA. Babu Abraham Kallivayalil, the Chairman and CA. Anil Bhandari, the Vice-Chairman of the Committee for Export of CA Services & WTO of ICAI.
The key purpose of the MoU is to bring together and also encourage global investment in India, foreign company registration in India and also foster Indian investments out of India. It also aims to offer required support and guidance to the probable investors, both inbound and outbound, and to encourage and promote India as an investment-friendly destination.
This collaboration of ICAI and Invest India is set to endorse international investment in India by offering the requisite guidance and aid to potential investors in terms of the regulatory compliances concerning investments in India. The ICAI has a wide network of its members spread across the globe; that would surely provide necessary support in this respect, especially in terms of taxation, accounting, legal and advisory services and also to aid in development of appropriate investment vehicle, etc.
In addition, this step would further help in fostering innovation and new technologies, start up India initiatives, facilitating investments across the world, creating more job opportunities especially in the field of Accounting and Finance Services, which are recognized by the Government of India under the Champion Sector.
ICAI also plans to assist Invest India in resolving their investment-related queries coming from both Indian and global organizations including financial investors and also start ups concerning information about applicable legislation and policies, procedure of filing applications and then assisting them in meeting other regulatory necessities to the extent possible.
Both parties would plan organizing investment promotional events such as road shows and investor outreach programs globally. They would also get together to organize training programs, webinars, events, seminars typically on investment-related subjects in different sectors of the Indian economy for encouraging investments and also to facilitate better connections between global investors and Indian business community.
- Newsletter, U.A.E
- February 19, 2019
The UAE government has been operating methodically on the task of diversifying the economy and is also investing in a big way in further developing the education and science sectors. They are utilizing new innovations and latest and progressive technologies, which are introduced via several start-ups. The number of schools and other institutes spread across UAE is set to increase in the coming few years. The main cause for this development is the continuous rise of the nation’s population. Going by the statistics, the country’s population has exceeded the 10 million mark last year.
Constant population growth contributes to the fact that more than 1 million children and people below the 25 years of age reside here. This calls for an enhanced demand for setting up additional schools and educational and training institutions at all levels, starting from pre-school, secondary schools, to universities and colleges. Though the increasing population also gives new workforce, but fresh investments, particularly in the education sector, are required for its proper development.
The nation has witnessed stable growth of GDP per capita as its GDP growth rates rank among the top-most not only in this region but also worldwide. With a constant rise in income, people tend to do extra investment towards their personality development and education, which in turn fosters further development of the educational sector in the UAE. Besides that, the overall development of the economy has also enabled the expansion of the educational sector at a higher level like professional courses, seminars, trainings, and other similar events aimed in increasing the competence and enhancing the skill-sets of the workforce.
Various educational programs are developed and executed here; an example could be the Emirati school model, or the government strategy named “Education 2020”. There have been innovations in this sector such as the new codes made for teachers and their new evaluation process, the all-new licensing process and the latest curriculum. The government has been planning to spend almost 10.4 billion Dirhams (2.83 billion Dollars) from the central budget for achieving this objective.
The UAE boasts of a developed sector offering premium services, which also applies to the education sector. Both Abu Dhabi and Dubai open new educational institutes and private schools every year; for example, last year 13 new private schools were opened in Dubai and 3 were opened in Abu Dhabi.
The government is aware of the fact that profits they gain from petroleum products’ sale would support the nation’s economy for many decades. However, the potential is limited and now the government needs to take care of newly-introduced income sources for the local budget. Developing the education sector is imperative for the diversification of the economy as the country requires educated and trained people who could help to develop new technologies, science, work in high-tech industries, in the medicine field and similar areas where specific skill-set and know-how is needed.
The government has also begun executing various new integrated programs with an objective to develop the education system of the country. Therefore, the Ministry of Education gives its unwavering support to educational institutions and schools and also helps them in their constant modernization. For instance, the state program called Programmed for International Student Assessment (PISA) and Trends in International Mathematics and Science Study (TIMSS) are being executed here. These steps are being taken with an aim to bring up the standard of education in various schools, colleges, and its universities to match up to a global level or of the standard of some leading and top educational institutions located in Europe and the USA).
The authorities know that if they invest well in the education of younger generation today, they would reap the benefit of getting educated residents in the near future, who will, in turn work towards developing UAE’s economy.
The good news is that the education sector has been developing exponentially in the UAE in the last few years, and this rise is only expected to accelerate further in the next few years. So if you are wondering on how to open education institute in Dubai UAE, do get in touch with us, and our experts in this field would be happy to assist you.
- Newsletter, Singapore
- February 19, 2019
The forthcoming Singapore Budget of 2019 is set to bring some good news for the SMEs. Yes, the Singapore government is planning to offer more help to their SMEs so that they could gain advantage from the policy assistance schemes and also help the businesses entering the Asean region, as per a report from DBS.
Irvin Seah, who is the DBS senior economist and has also authored the report, was of the view that there are some guidelines and policy measures that look like being “skewed in favour of bigger companies”. An example of this could be the schemes like the SME Working Capital Loan, which is being facilitated through various financial institutions (PFIs) which are participating, but the inclination for these PFIs are titled towards big businesses who have a sounder financial position.
Irvin Seah also mentioned that in spite of the fact that the government provides some risk coverage, the consequence is that small-size enterprises who require more financing assistance might not get the required assistance irrespective of their creative business ideas or product innovation.
The government is also thinking of taking on a larger share of the risk on itself, especially for small-size businesses who are asking for financial aid. This would also bring these assistance schemes within a closer reach, hence making company formation in Singapore easier.
Though this has been done for the Automation Support Package already, additional enhancements in the policy direction favoring smaller businesses can also be applicable to many of the current support schemes.
SMEs that are lower than a specific level of total sales turnover should be additionally provided with further attention in their grant applications; for instance by simplifying the requirements of documentation in the grant application procedure.
Seah was also of the opinion that the policy effectiveness should be sharpened by improving and quickening the grant approval process and lending better support to the trade associations (TACs).
A fast track scheme especially for getting grant approvals can be executed for some specific high-growth industries so as to encourage strengthening of investments in those particular clusters.
In addition, TACs would be given additional support in establishing new overseas offices so as to facilitate the local organizations that are getting into international markets, in a better manner.
Armed with an improved understanding of different types of enterprises and markets, the TACs will be able to pull in their resources and domestic contacts to assist their members in exploring the overseas markets. This can be probably more useful than Enterprise Singapore (ESG) overseas offices which are typically swarming with business-related and other bilateral relationship issues.
Seah was of the opinion that helping the businesses venture abroad, especially to Asean countries, might receive additional momentum in the Budget 2019.
With new trade and international investments expected to be diverted in this region in the coming few years, Singapore would be in a unique position provided its regional hub status, high level of enterprise sophistication and a wide free trade agreement network.
He also said that policy measures taken by the government to offer enhanced support for enterprises in enhancing their capabilities and offerings and in their attempt for internationalization is set to surely bring optimistic results in mid to long-term.
The government is expected to stay on track in its efforts of reformation to groom and prepare the economy for the future times, instead of using fiscal incentives as a counter-cyclical policy tool.
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